The following is a reproduction of a letter sent on 30 October 2009 to all shareholders by Stephen Vernon, Board President, on behalf of the Nagle Apartments Corp. Board of Directors and Management.
The Board and Management want to bring an issue to your attention that may have a financial impact to you and to our Co-op. As of the last Board meeting, arrearage in maintenance payments (late payments) has increased to approximately $65,000. This is nearly one month’s worth of budgeted cash collections. In comparison, one of our neighbor buildings consistently has less than $500 arrearage at the end of each month.
While we have reserves and can weather a temporary reduction of collections, we are not in a position to carry this much of a cash loss for extended periods. The Board and Management are working hard to make sure all of the charges are collected. We want you to be informed that if we have to fund this amount as a maintenance increase on next year’s bills, this would add approximately $.48 per share per month to everyone’s charges. Here is what it would look like per month for each type of unit should this occur:
|One bedroom R Line||$40.70||$43.09||$45.49|
The following table is what it would look like on top of the current $6.05 per share per month for each type of unit should this occur:
|One bedroom R Line||$554.95||$587.59||$620.24|
The Board and Management realize how unfair this may be but the simple truth is that if we don’t have cash in the operating account, we can’t pay operating bills.
If you pay your maintenance on time each month, you have our respect and gratitude. If you miss on occasion and get caught up again the next month, we understand. However, if you are chronically late, you are placing an unacceptable burden on your neighbors and hurting your own financial condition (up to and including unnecessary legal charges and potential loss of your investment).
One of the strengths of a housing cooperative is the ability to work together to achieve goals none of us could accomplish on our own. The minimum requirement in working together is taking responsibility to pay shareholder charges timely. In that light, we encourage those of you in financial difficulty to schedule a payment plan with management. Taking this action early could save the late shareholder unnecessary legal fees. Late shareholders and shareholders with payment plans will still have to pay late interest. Management does not have the authority to forgive charges on shareholder bills.
Finally, our bank loan covenant with Amalgamated Bank gives the bank the right to impose a maintenance increase should collections fall behind certain levels. We are already below this threshold. While I can’t tell you what the bank may decide, I can tell you that we have until 12/31/2009 to increase our cash collections ourselves before they become aware of arrearage levels.
Please make every effort to pay your monthly charges by the 15th of each month.
Stephen Vernon, President
On behalf of the Nagle Apartments Corp. Board of Directors and Management